Overview
The Direct Expatriate Nationals Investment (DENI**) model was originally designed as a Debt Relief and Poverty Reduction program but has since morphed into Enhanced DENI as a Poverty Reduction and External Resource Mobilization Program for countries that have received massive debt cancellation from the HIPC Program. Therefore, of the three applications of DENI, namely: (a) debt relief (b) poverty reduction and (c) external resource mobilization, only (b) and (c) remain enduringly valid for purposes of Enhanced DENI which is designed to turn a country’s liabilities into assets. Already, 14 African countries have received bilateral and multilateral debt cancellations and qualify for Enhanced DENI.
The Ingenuity of DENI is that it is a debt conversion in its impact but totally original in concept. Unlike other proposals that are out there in the marketplace of ideas, DENI is a people’s solution to the intractable twin problem of debt Relief and Poverty reduction that has bedeviled Africa for so long with no end in sight. The program is based on mobilizing ordinary African nationals living in North America and Western Europe as well as those scattered elsewhere around the globe to buy out the official debt owed to Paris Club (and other creditors if available) at a negotiated price with debt vouchers (in modest amounts) that are redeemable at home in a variety of local assets but not in local currency. DENI requires that each country’s nationals address their own country’s debt, meaning Nigerians for Nigerian debt, Senegalese for Senegalese debt, Kenyans for Kenyan debt and so on, down the line. There will be no cross-border purchases.
DENI as an excellent facilitator of Africa’s privatization programs of State-Owned Enterprises (SOEs). Most Africans will be happy to invest all of their DENI proceeds in any of the SOEs slated for privatization. As a DENI illustration, take for example: 1,000,000 country nationals x $1,000 will raise (in 8 months) a fund of $1,000,000,000 for the Government that is not a loan and is not grant. No strings attached. No humiliating conditionalities. The program will be totally owned by the Government and its nationals at home and abroad. All this in exchange for asset shares in privatized SOEs - thus keeping the family jewels in the family, instead of selling them to foreigners. Then, take the 1,000,000 direct participants x 20 (extended family factor) = 20,000,000 citizens (the entire population of some countries) stands to benefit from this single program alone in terms of poverty reduction. It’s a win-win situation for everybody.
Ownership Culture
There is no sustainable way to poverty reduction unless Africa widens the base of economic participants. Ownership and individual enterprise are the sine qua non of sustainable development. DENI is a new development paradigm, based on broad participation of the masses in market driven economic activities. This paradigm is discussed in the context of DENI and Enhanced DENI which does not only postulate but provides a road map of how Africa can create millions of entrepreneurs and business asset owners and not just a handful of millionaires.
The ingenuity of DENI is to widen the base of Africans participating in the revival and stimulation of their economies. There is no massive program anywhere in Africa that is attempting to do this. DENI will be the first and one-of-a-kind that positively impacts the people at the grassroots, precisely where poverty is concentrated. Initiatives such as NEPAD pride themselves in looking for African solutions to African problems. But there is nothing in the NEPAD documents that speaks of prosperity sharing. NEPAD has a lot of laudable goals but based on the wrong premise“ that money is the cause of development, not the effect. The truth of the matter is the other way around. DENI insists on a steady broadening of asset ownership to correspond to a steady and measurable alleviation of poverty. An asset ownership strategy “ as yet an overlooked component in African countriesPRSPs “ holds great promise in turning assetless citizens into proactive stakeholders in the stability of their country. This can be done without a penny of foreign aid. **The original comprehensive paper on DENI is available upon request by email to any of the Principals cited in the Rapid Response Team.